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Economy in Brief

U.S. Leading Economic Indicators Firm Again
by Tom Moeller   November 18, 2010

The Conference Board reported that its Index of Leading Economic Indicators rose 0.5% during October after an upwardly revised 0.5% September increase that was initially reported at 0.3%. The latest reading was a record high. Again, the gains pulled the three-month rate of increase up moderately to 4.8% (AR). Early this year the index was rising at a double-digit rate. The leading index is based on actual reports for eight economic data series. The Conference Board initially estimates two series, consumer and capital goods orders.

The breadth of increase amongst the component leading series improved to 75%, its highest since December. A steeper interest rate yield curve made the largest contribution followed by higher stock prices and a higher money supply. Average weekly hours worked and consumer expectation made modest positive contributions. Other series were roughly unchanged. Nondefense capital goods orders and vendor performance made negative contributions.

The index of coincident indicators ticked higher for the second month in the last five. The three-month change of 0.4% remained its weakest since October of last year. Three of the four component series ticked up last month including payroll employment, real personal income and business sales. Industrial production was unchanged.

The lagging index rose for the fifth consecutive month. The ratio of coincident-to-lagging indicators (another leading indicator) was unchanged after falling for four consecutive months..

The Conference Board figures are available in Haver's BCI database. Visit the Conference Board's site for coverage of leading indicator series from around the world.

Business Cycle Indicators(%) Oct Sept Aug 3 Mo %Chg
Annual Rate
2009 2008 2007
Leading 0.5 0.5 0.1 4.8 0.5 -2.7 -0.2
Coincident 0.1 0.0 0.0 0.4 -5.1 -1.2 1.4
Lagging 0.1 0.5 0.1 2.6 -1.6 3.2 3.0
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